Crowding, the difficult identification of peripherally viewed targets amidst similar distractors, has been explained as a compulsory pooling of target and distractor features. The tilt illusion, in which the difference between two adjacent gratings’ orientations is exaggerated, has also been explained by pooling (of Mexican-hat-shaped population responses). In an attempt to establish both phenomena with the same stimuli—and account for them with the same model—we asked observers to identify (as clockwise or anticlockwise of vertical) slightly tilted targets surrounded by tilted distractors. Our results are inconsistent with the feature-pooling model: the ratio of assimilation (the tendency to perceive vertical targets as tilted in the same direction as slightly tilted distractors) to repulsion (the tendency to perceive vertical targets as tilted away from more oblique distractors) was too small. Instead, a general model of modulatory lateral interaction can better fit our results.